Learning from the mistakes

Bata Pakistan has experienced few mentionable mistakes in its marketing strategy in
the past. One of those was when BATA decided to embrace the high-end segments of
the Pakistani shoe market as a part of its target market. It launched quite a few brands
for this segment with higher price tags. The move landed BATA in trouble. This segment
was not meant for BATA. In the first place, this segment was not sizable for a company
like BATA. Second, the segment did not get with Batas distinctive competence. The
segment constituted a mere 5 to 10 per cent of the footwear market in Pakistan. It could
not provide the volumes that BATA was used to at the mass end and high volume was
essential for BATA for having healthy bottom line. Worse still, the adoption of the
segment misdirected Batas entire strategy. The top end of the market suddenly became
the main focus of the company and it forgot its bread-and-butter shoes that had given
the company its identity. And, small regional competitors started nibbling away at Batas
mainstay. Actually, Bata was squeezed at both ends. At the lower ends, smaller
competitors attached Batas mass range in schools shoes and chappals, which the
company had practically vacated on its own by ignoring them completely. At the high
end, niche competitors, who were better prepared, were challenging Bata. From the
market share of around 15 per cent in the mid 1999s, Bata found its share slide down to
10 per cent of the footwear market in mid 2000s. The year 2001 saw the company
running a loss of Rs. 42 million.
After learning the lesson the hard way, BATA did an about-turn from its adventure with
high-end-segment and returned to the mass segment. The new strategy was to get
back to the original customers at the low end and keep that part of the market as its
core focus. The company, of course, did not totally give up the new segment it had got
into in the early 1999s. Brands like Hush Puppies, for example, continued to be sold by
Bata, but in a selective way and through select stores only. (Anil Chawla, June 2003,
Marketing Management).

Having faced an adverse situation, BATA successfully reinvented itself as a renowned

retailer offering customers the best in footwear in terms of fashion, quality and
introduced the concept of flagship stores to provide a complete and unique shopping
experience based on modern trends, relaxed ambience, great products and courteous
staff at the new-look flagship stores which are all part of Batas new marketing strategy
paving the way of success for BATA, and it is a prominently practical example of BATA
marketing strategy of monitoring and evaluating the marketing strategy in practice and
then taking essential steps and changes accordingly as measuring the effectiveness of
what has been done, and be prepared to change things that arent working.
BATA has effectively worked on consolidating the existing branded business activities
into a leading and professional company that has helped in significant reduction of the
companys trade-debt burden. The company is strictly controlling on credit and reducing
the outstanding receivables and it is able to augment its financial position to a greater
extent. BATA Pakistan has strengthened its position on the stock exchange as evident
from increasing P/E ratio and market per share. Backed by increase in demand, EPS
has shown an upward trend as well until recently when it declined owing to instability in
the country, which depressed the turnout to the retail stores of the company. The net
value of the company is not very high. The company proposed a higher dividend in
Nov.2007 due to the better results. It raised the final dividends by 20% thus increasing
the investors confidence.
(Business Leader, Pakistan, March 2008, BATA Pakistan Ltd: Investors perspective
and Future Outlook).
Future Outlook
Increase in the cost of production primarily because of the hike in prices of raw
materials, interest rates and transportation costs might pose a challenge to the
company. The increased costs might depress sales for the company along with affecting
the top-line and bottom-line. Furthermore, Bata Pakistan should increasingly divert its
focus towards innovation, new designs and maintenance of its retail outlets in order to

keep its customers base intact. The cut-throat competition from the imported cheap
price shoes and many new and existing local outlets can significantly affect the
company business. In order to maintain its success as a household name for the people
of Pakistan, creativity and research for higher quality should lie at the core of Bata
product development policy. Bata needs to consistently focus on the development of
shoes with exclusive comfort, technology features and designs available to the people
through a chain of modern large format and sport concept outlets bringing in new trends
to suit the needs of both the traditional and the trendy. Feed back from customers and
employees, goof salaries packages coupled with bonus packs for the employees, using
customer data, in store speciality/assistance counters, gifts with purchase, incentives for
the retailers, promotional items like t shirts with BATA printed on them, sponsorship of
sports especially cricket as it is the most popular game with the Pakistani people,
issuance of loyalty cards and delivery services can be of great help for Bata, particularly
in its marketing.

Focussing on its brand development has resulted Bata in the following success:
Key Stats & Ratios
(Jan-Jun 2010) (July-Dec2010)

Net Profit Margin 3.67% 4.66%

Operating Margin 6.45% 6.86%
Return on Average
Assets 7.89% 9.28%
Return on Average
Equity 16.66% 19.24%
Employees 2912
(Commercial Credit Report for BATA Pakistan, Ltd. 2010)
BATA Pakistan has categorized an aggressive advertisement to be its first priority. It has
been prominent in rationally and scientifically promoting public awareness for the right
selection and usage of good quality shoes that has helped modifying public thinking
about shoes selection and usage, and also increasing sales for Bata. Following are a
few of the scientific facts highlighted by BATA:
Unstrained Walking: You walk on average about 10,000 steps a day. So during your
lifetime you will have most probably walked enough steps to have traveled around the
planet more than 4 times. For such a long ride, your feet deserve a comfortable vessel.
Shock Absorption: With each step, all of your weight is absorbed by tissues throughout
the feet. The heel in particular absorbs most of your bodys weight. Did you know that
you carry about four to six times of your body weight across the ankle joint when
climbing stairs due to the mechanics required to your body? That explains why a soft
landing is precious for your feet.
Safe Ride for your Feet: Have you experienced riding motorbike in sandals? You
probably felt the burnt from the exhaust heat, slipped from the brake pedal, and got
scratches with the gear shaft. Those are many annoyances making your ride

uncomfortable and potentially dangerous. Now you can let your feet breathe and be
safe at the same time when you ride your bike with BATA shoes.
Fresh Feet: There are more sweat glands per inch in your feet than
any where else in your body, approximately 2,50,000. And they
secrete all the time, as much as 20 cl of moisture everyday and not just
in response to heat or exercise, so your feet do need to continue
breathing even while locked up in your shoes.
Snapshot of Bata Pakistans Marketing Strategy
Batas marketing strategy focuses on:
-analysing the different needs of different groups of customers
-making the most of the companys strengths and match them to the needs of the target
customers
-offering customers the best in footwear in terms of fashion, quality and price
-concentrating a market niche where BATA can be the best
-acknowledging the existing and potential customers, grouping and segmenting them
characterized them by their needs and preferences in terms of shoes selection and
usage
-put the marketing strategy into effect with a marketing plan that sets out actions, dates,
costs, resources and effective selling programmes
-measuring the effectiveness of what is being done, be prepared to change things that
arent working

-considering the mixture of controllable marketing variables that the company will use to
pursue the sought level of sales in the target market
-implementing and controlling the marketing efforts by collecting feedback and getting
back to planning
-using forms of advertising that work the best i.e. exhibitions, creating effective points of
sales, public relations initiatives, newspapers and TV ads
-consolidate the existing branded business activities into a leading industrial and
professional footwear company
-promoting awareness about the importance of right selection and usage of footwear
from health-consciousness and scientific researches angles
-supporting education and encouraging entrepreneurship to fight poverty and exclusion
via auto-subsistence with Batas values regarding communities involving:
a) Respecting the integrity of local culture
b) Considering communities as partners in progress and involving employees in a twoway communication with them
c) Allocating resources to enhance the well-being of the communities in which BATA
operates
d) Collaborating with people in the communities who are dedicated to raising standards
of education and economic well-being.
(www.bata.pk/marketing)